A Palestinian youth leads a donkey next to signs leading to Jewish settlements in the northern West Bank, Sept. 27. Israeli-Palestinian peace negotiations hung in the balance Monday as Israel ignored international pressure to extend a 10-month freeze on Israeli settlement construction in the West Bank.

If the talks fail to deliver a negotiated peace, Arab neighbors such as Lebanon could be left with more than 1 million Palestinian refugees whose families fled or were forced out of their homes when Israel declared independence in 1948.

After more than 60 years, the refugees remain caught between a halting peace process that has yet to secure the "right of return" they seek and an uncertain future in Arab countries such as Lebanon, which is reluctant to allow them to fully integrate into society.

“It is the lost peace,” says Brig. Gen. Mounir Moqdah, a veteran Palestinian warlord and a senior official in Mr. Abbas’ Fatah movement in Ain al-Hilweh, the largest of 12 formally recognized Palestinian camps in Lebanon. “No one trusts the negotiations anymore. This is negotiations for the sake of negotiations.”

His words draw murmurs of agreement and nodding heads from a dozen middle-aged Palestinians sitting in threadbare armchairs lining the walls of Moqdah’s smoke-wreathed office in a white-washed building, known with deliberate irony as the “White House” in the heart of the camp.

A breeding ground for Islamist militants

Ain al-Hilweh, a teeming camp less than one square mile in size, houses 70,000 of the estimated 300,000 Palestinian refugees in Lebanon.

The camps were established in 1948 during the war that gave birth to the state of Israel and the disenfranchisement of hundreds of thousands of Palestinians driven out or coerced into leaving their homes. Among them was Mahmoud al-Saleh, then a 9-year-old boy living in the village of Sasa, close to the border with Lebanon.

“We were being bombarded with mortars so the whole village left,” recalls Mr. Saleh, today a wizened 78-year-old with mahogany skin and a white lace skullcap on his bald head. Taking nothing with them, his parents and five brothers and sisters crossed the border with Lebanon and stayed in the village of Rmeish.

“We thought we would be away for only a few days,” he says.

After six months, the Lebanese Army moved the Palestinian refugees into the newly established camps where Saleh has lived ever since.

Ain al-Hilweh, Arabic for “sweet spring,” is a slum of cramped alleyways and small, poorly constructed homes which increase in height as new floors are added to accommodate each new generation. It lies outside the direct jurisdiction of the Lebanese state and its entrances are controlled by the Lebanese Army.

The sense of despair is palpable. Drug use is rampant, and most refugees are unemployed and live on handouts from a United Nations agency. The camps – Ain al-Hilweh in particular – are breeding grounds for Islamist militants and a safe haven for criminals evading Lebanese law.

Why Palestinians don't have full rights in Lebanon

In August, the Lebanese parliament voted to grant greater employment rights to Palestinians, overturning a law that had prevented them from working in all but the most menial of jobs. But the new law still forbids them the right to work in top professions in Lebanon, such as medicine and law, and bans them from owning property.

Despite Lebanon’s perennially fractious politics, Lebanese from all backgrounds are united on one point: They oppose the concept of tawteen, the Arabic term for the settlement and naturalization of the Palestinians in Lebanon.

Granting citizenship to the mainly Sunni Palestinians would upset the delicate sectarian balance in Lebanon. The result is that the Palestinians in Lebanon are deliberately kept in conditions of squalor to discourage the possibility of permanent settlement here.

“Nothing has changed for the better in the camp. What was granted by the Lebanese parliament was already in place,” says Sheikh Jamal Khattab, the leader of the Harakat al-Islamiyyah Mujahidda, the “Islamic Strugglers Movement,” and the most influential Islamic figure in Ain al-Hilweh.

Many refugees pin hopes on armed struggle

Dressed in a white robes and speaking fluent English, Sheikh Khattab is equally pessimistic on the prospects of successful Israeli-Palestinian talks, treating them with the same weariness as other Palestinian refugees.

“We don’t trust these negotiations and consider them a waste of time. These talks have been going on nearly two decades and the Israelis are still deporting Palestinians from Jerusalem and building their settlements in the West Bank,” he says.

Some Israeli officials have warned that a collapse of talks with the Palestinians could lead to renewed violence. The failure of the Camp David talks in the summer of 2000 prepared the ground for the second intifada, the tenth anniversary of which falls Tuesday.

Given the lack of faith in peaceful diplomacy, many Palestinians in Ain al-Hilweh still pin their hopes for a right to return to their original homes on the armed struggle.

“We are the owners of the land and I assure you in the next few years you will see the beginning of the end of the state called Israel,” says Moqdah, the brigadier general, citing Israel’s inability to crush the militant Lebanese Shiite group Hezbollah in a month-long war in 2006. “Hezbollah defeated the Israelis like rats and put fear into the hearts of the Israeli settlers,” he adds.

As for Saleh, he has had only his memories of his home in Sasa to sustain him during the decades of exile. He speaks wistfully of a village blessed with fertile soil where farmers grew olives, tobacco, apples, and pears. Does he think he will ever see his former home again?

“Only God knows,” he says. “But I think we refugees have been forgotten. All leaders just use us as tools.”